Indian stock markets experienced a tumultuous week in early June 2024, with major swings in both directions due to the uncertainty surrounding the Lok Sabha election results. The week started on a high note with indices hitting all-time highs, fueled by optimism for a strong win by the ruling government. However, the surprise outcome of the election, with the BJP failing to secure a majority on its own, led to a sharp seven percent drop in the markets on counting day.
Despite the initial setback, the markets quickly rebounded as clarity emerged regarding the formation of a coalition government under PM-elect Modi. Domestic buying outweighed foreign sales, leading to a strong recovery rally towards the end of the week. The Nifty 50 and Sensex recorded their best weekly gains in months, closing near all-time highs.
The Reserve Bank of India’s Monetary Policy Committee kept the repo rate unchanged in its first meeting post-election, but raised the FY24 growth projection slightly. Analysts expect volatility to decrease in the coming weeks, with the focus shifting to domestic macroeconomic data and the upcoming Union Budget.
Looking ahead to the second week of June, investors will be closely monitoring ongoing election developments, the US Fed interest rate decision, domestic and global macroeconomic indicators, foreign fund inflows, crude oil prices, and global cues. Several new IPOs and listings are also scheduled for the week, adding to the market activity.
Market analysts believe that the election-related volatility is now behind us, and the Nifty 50 may continue its upward momentum towards 23,400-23,500 levels. However, traders are advised to remain cautious and focus on stocks aligned with the benchmark indices.
Key triggers for the stock markets in the coming week include domestic macroeconomic data releases, the US Fed policy decision, FII activity, global cues, oil prices, corporate actions, and technical views on the market. Investors are urged to stay informed and consult with experts before making any investment decisions, given the rapidly changing market conditions.
